This feature is part of a series focused exclusively on employee engagement. To view other posts in the series, check out the spotlight page.
The performance review as it has been known is no more. At least that’s the consensus among some forward-thinking performance management specialists.
The performance appraisal has been the dreaded annual ritual for many employees, the nerve-rattling recap of everything they did wrong during the past six to 12 months. For managers, the annual appraisal has been a mandatory chore that’s more focused on past performance than on future improvement.
If the traditional performance review isn’t dead, it seems to be dying. And studies are documenting its demise. A 2015 Human Capital Institute study found that managers’ least liked workplace function behind firing employees was the traditional performance review.
More companies are adopting a performance management system that schedules weekly or monthly meetings in which managers and employees discuss performance goals and progress.
A tradition on life support?
Andee Harris, chief engagement officer at HighGround, a Chicago-based software firm, told HR Dive that all indicators seem to point to the phasing out of the traditional performance review.
“It depends on the organization’s culture. Some partial phaseout is occurring,” says Harris. "Organizations with appraisals tied to ranking, raises and shift differentials will need to figure out the compensation piece before replacing the old system.”
HighGround studied 525 managers and 525 employees for a report, Beyond the Annual Review: The Transformative State of Performance Conversations. The report shows that only 7% of companies give traditional performance reviews, compared with 51% who have once a week conversations between managers and staff.
In a white paper titled, Why Traditional Performance Management Systems Aren’t Working, Kimberly Dempsey Schaufenbuel, senior vice president of talent management for the University of North Carolina, wrote that a failure of the traditional performance review is its focus on past behavior, while employers have largely shifted towards developing workers’ future performance.
Companies like Deloitte, Microsoft, Accenture and Adobe agree. They shed the six to 12-month review for more frequent talks between managers and staff about career development.
A high-profile holdout
Among the most well-known keepers of the traditional performance review is Facebook. The social media giant polled 300 people in focus groups and surveys to find that 87% favored the traditional performance review. So, the company kept it.
Facebook contends that it’s sticking with the traditional performance review to maintain the firm’s core values of transparency, openness and fairness in its performance management system. Managers write evaluations to discuss, debate and deliberate, then decide whether to keep or revise them based on peer feedback.
When asked how much bias plays in performance reviews, Harris said that while it does play a part, employees and managers can ask for feedback to minimize unfairness in evaluations.
From quotas and deadlines to growth and development
Millennials are driving the switch to more frequent conversations about performance development, says Harris. HighGround’s report shows that 58% of millennials engage in weekly conversations versus 39% of boomers.
The report also shows that female managers are out ahead of their male counterparts by 72% to 63% in holding frequent manager-employee conversations.
Harris says the key to forward-looking performance reviews is frequency and collaboration.
“Conversations should be to the point and two-way. Managers should be asking employees, ‘How can I help’ to allow for growth and performance changes.”